### New Rules on Sustainability Reporting: What Changes for Companies?
In order to promote greater environmental, social, and governance (ESG) responsibility, the European Commission recently published an informational document clarifying the new regulations regarding corporate reporting obligations. These changes, which will take effect from January 2025, represent a significant evolution in the landscape of corporate sustainability. But what does this new regulation entail, and how can small and medium-sized enterprises (SMEs) navigate this new context?
#### The Importance of Sustainability Reporting
Sustainability reporting is proposed as a fundamental extension of the traditional financial statement, introducing a non-financial report to complement the economic one. This new approach aims to provide a comprehensive picture of the corporate impact not only from an economic perspective but also concerning environmental, social rights, and corporate governance. Data must be presented following specific international ESG parameters, meaning “Environmental, Social, and Governance.”
#### Who is Subject to These New Obligations?
The scope of application of the new rules has been a topic of great interest and discussion. According to the Commission’s guidelines, the obligation to prepare a sustainability report will primarily impact large listed companies starting in 2025, followed by non-listed companies in 2026. Medium and small listed companies will have to comply starting from 2027.
For small and medium-sized enterprises (SMEs), which have historically had fewer resources and capacity to manage complex regulatory burdens, the new directives may seem daunting. However, the Commission has proposed exemptions that could lighten the bureaucratic load for SMEs while still ensuring a responsible approach to sustainability.
#### What Are the Exemptions?
The European Commission has clarified that certain types of companies will benefit from exemptions regarding the obligation to report on sustainability. These exemptions generally pertain to small businesses and companies with limited revenues. The intent is to provide support to these operators so they can focus on their core business without being overwhelmed by constraints they might consider excessive or challenging to manage.
#### Reporting Principles to Follow
Another crucial point of the document concerns the reporting principles that companies must adhere to. The European Commission emphasizes the necessity of transparency, comparability, and consistency in the information presented. Companies are encouraged to adopt recognized methodologies to ensure the reliability of the data. This is a vital step to inspire trust among investors and consumers.
#### ESG Reporting Tools
To assist companies in complying with the new regulations, the European Commission has also provided guidance on useful reporting tools. There are various ESG reporting frameworks and standards available for companies, including the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB).
Adopting one of these standards allows companies to align their reporting practices with those of other organizations, thus improving data comparability. In this way, enterprises can not only meet regulatory obligations but also position themselves favorably in the market, demonstrating their commitment to sustainability.
#### The Perspective of SMEs
For small and medium-sized enterprises, adapting to these new regulations may seem challenging. However, there is an opportunity in every challenge. SMEs that embrace sustainability reporting not only comply with a legal obligation but can also use this new focus as a marketing and communication tool. In an increasingly sustainability-conscious market, companies that demonstrate their commitment to ethical and responsible practices can gain a competitive edge.
